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Raising capital on a low yielding house

03.11.14 Buy to let Mortgages Case Study

An experienced landlord who owns residential investment property in West London encountered difficulty in raising capital with conventional lenders because the rental income yield on her property was too low to meet their lending criteria.

Our solution was to recommend and arrange an equity release (second charge) mortgage through a specialist lender. This was appropriate as there is no rental income assessment needed on the capital raised and no monthly interest repayments are required.

The loan is scheduled to be repaid in 10 years’ time as a single lump sum plus a share to the lender of any future growth in the property value. The capital raised has enabled the investor to put down a deposit on a further buy to let property.

Here are the details of the deal:

Property Value: £1,500,000

Loan amount: £150,000

Loan to Value: 10%

Rate: 20% share of any increase in the value of the house

Term: 10 years

Arrangement fee: 2.0%

Completion date: October 2014

This is just one example of how I've helped a client secure a buy to let mortgage. To see more of my case studies please visit my profile page. And if you have any funding requirements, please do not hesitate to contact me. My direct line and email address can be found below.